General Motors, Renault and Nissan said last night that they have cut off discussions about forming an automotive alliance after GM sought compensation for its participation.
"The parties mutually recognized that significant aggregate synergies might result from the alliance," the three companies said in a joint statement.
"However the parties did not agree on either the total amount of aggregate synergies or the distribution of those benefits."
GM's board decided unanimously Tuesday that the proposed alliance was not in the best interest of the company's shareholders, GM Chairman and Chief Executive Rick Wagoner said at a news conference Wednesday.
General Motors had proposed that Renault SA and Nissan, which are already joined in an alliance, provide compensation as part of a potential link-up, the companies said.
The reason for that was twofold, GM spokesman Brian Akre said. First of all, GM wanted payment because it believed it would have benefited far less than Renault and Nissan, Akre said. In addition, an alliance could have prevented GM from teaming up with other companies.
GM also argued that if Renault-Nissan acquired a significant stake in the US automaker, GM would be prevented from joining any other alliances.
But Renault and Nissan believe compensation would be "contrary to the spirit of any successful alliance,".
